Part of the government’s consultation on insolvency and corporate governance is seeking views on whether more should be done to help protect payments to suppliers, particularly smaller firms, in the specific event of the insolvency of a customer. In seeking views it also wants to understand whether there would be any wider, perhaps unintended consequences, from taking such steps and how they might be managed.

Possible approaches include increasing the use of specific mechanisms such as Project Bank Accounts and preventing the misuse of certain typical construction payment provisions, for example, the withholding of retention, the subject of the consultation that closed in January.

The government has also launched a consultation on whether it would be appropriate to exclude suppliers from major government procurements if they cannot demonstrate a fair, effective and responsible approach to payment in their supply chain management.

See: https://www.gov.uk/government/uploads/system/ uploads/attachment_data/file/691857/ Condoc_-_Insolvency_and_Corporate_Governance_ FINAL_.pdf and

https://www.gov.uk/government/consultations/ prompt-payment-by-government-suppliers